Energy Loan Program

Summary

Note: FY2016 (2.75% interest rate) loan cycle is now open. Loan applications submitted are being accepted from September 1, 2015 to November 30, 2015.

The Missouri Energy Loan Program, administered by the Division of Energy in the Missouri Department of Economic Development (DED), is available for energy efficiency and renewable energy projects for public and governmental buildings and structures. Eligible recipients include public schools (K-12), public/private colleges and universities, city/county governments, public water and wastewater treatment facilities, and public/private non-profit hospitals.

Loan amounts are based on projected energy savings from energy efficiency upgrades, which result in monetary savings that are used to repay the loan. For Fiscal Year (FY) 2016 financing is set at a 2.75% interest rate and 1% loan origination fee. Repayment schedules are determined on an individual project basis, but not to exceed 10 years. Loans under this program are determined on a competitive basis according to payback period.

In FY2014, $5,000,000 in loan funding was available, and in FY2015, $7,500,000 in loan funding was available. Loans are available in amounts from $10,000 to $1,000,000 per applicant.

Background

The Missouri Department of Economic Development’s Division of Energy has provided the energy loans from petroleum violation escrow funds and bonds since 1989. Since the program's inception, loans totaling over $89 million have been made through this program, resulting in an estimated cumulative savings of $167 million. The interest rates for energy loan financing are generally lower than the market interest rates. Loan recipients repay the loans with money saved on energy costs as a result of implementing energy efficiency and renewable energy projects. An energy saving loan is not defined as debt for public schools and local governments and therefore does not count against debt limits or require a public vote or bond issuance.